Understanding Debt Service Funds in Governmental Accounting

Explanation

The statement is true: Debt Service Funds do not include debt issued for and serviced by Enterprise or Internal Service Funds. Debt Service Funds are typically used in governmental accounting to account for the repayment of general long-term debt, including principal and interest.

In contrast, debts issued for Enterprise or Internal Service Funds are usually self-sustaining through the fees and charges for services they provide to users and are accounted for separately within the funds themselves. Therefore, the servicing of such debt is handled within the Enterprise or Internal Service Funds and not through Debt Service Funds.

Debt Service Funds play a crucial role in ensuring the proper management and repayment of governmental debts. By segregating debt repayment activities into a separate fund, governments can effectively monitor and allocate resources to meet their financial obligations.